African startups are unprepared for exits 

Africa’s exit panorama stays sparse as a result of founders are underprepared. Within the  State of Exits in Africa session at Moonshot by TechCabal 2025, audio system Freda Isingoma, Senior Fund Supervisor at Octopus Investments, and Ariel White-Tsimikalis, Accomplice, Goodwin Procter, famous that whereas funding rounds have grown, profitable exits via acquisitions or preliminary public choices (IPOs) are nonetheless uncommon. 

The difficulty, they argued, is that many firms aren’t constructed with exit-readiness in thoughts. From weak governance and fragmented possession to poor documentation, too many firms scale rapidly however construct little {that a} purchaser can truly purchase.

“I see that a whole lot of founders optimise for now, centered on their subsequent funding. However you must construct a enterprise that thinks past that. It’s a must to construct buildings and put procedures in place,” White-Tsimikalis added.

Based on knowledge from Africa: The Large Deal, the continent recorded 19 tech startup exits in 2023. The first driver of those exits is Mergers & Acquisitions (M&A), which has turn into essentially the most lifelike and customary path to liquidity for founders and their buyers.

African founders typically overlook the significance of early preparation. Tsimikalis emphasised that many startups focus solely on short-term fundraising, neglecting long-term structuring. She cited widespread pink flags, together with unconnected authorized entities throughout markets, weak IP safety, poor board composition, and lax governance, all of which decrease valuations and delay exits. 

Constructing a powerful, documented, and compliant basis, she mentioned, helps founders management the fairness story as an alternative of defending dangers. As Isingoma put it, founders should design their companies to enchantment to patrons or public markets earlier than they wish to exit. 

Isingoma really helpful sensible market routes for smaller development firms, drawing consideration to worldwide markets as accessible choices for earlier public listings. She famous that deeper native capital swimming pools, particularly at Sequence B and C phases, would unlock extra exit alternatives. She highlighted the UK’s Various Funding Market (AIM) as a mannequin, a platform the place smaller, high-growth corporations can go public with lighter regulatory necessities. Isingoma recommended that African firms take into account an fairness line into a global alternate to realize liquidity and faucet institutional capital whereas supporting native operations.

Ultimately, the panel agreed that exits don’t simply occur. Founders who construct with exit-readiness like clear authorized connectivity, strong governance, defensible IP, and a transparent fairness story, will unlock liquidity and make their firms investable on native and worldwide phases.